financial master data presentation
TRANSCRIPT
7/31/2019 Financial Master Data Presentation
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County of ______
Financial Master Data
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Comments
• All Master Data is related
– Some relationships are defined by SAP
– Master Data Design
– Derivation Strategies• Objective of Master Data
– Simplify Data Entry
– Greater Accuracy
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Financial Accounting
• General Ledger Accounts – Balance Sheet
• Assets• Liabilities
• Equity – Profit and Loss
• Revenues• Expenses
– External
• Customers• Vendors• Banks
• Business Areas• Full Accrual Accounting*
• Partial Accrual Accounting*• Fund Accounting• Cash Accounting
* Additional accounts are needed to support both types of accrual accounting
(e.g. two sets of asset accounts)
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Cost Accounting
• Cost Elements
– Primary – Secondary
• Cost Objects
– Cost Centers – Internal Orders
– Work Breakdown Structures (WBS elements)
– Work Orders
• Cost Accounting
• Project Accounting
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Public Sector Accounting
• Funds
• Functional Area• Commitment Items
• Budgetary Accounting
– Control Objects• Funds Centers
• Funded Programs
• Grant Accounting – Sponsored Programs
– Sponsored Classes
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Reporting Requirements
• Government Wide Financials
• CAFR
• Support Financial Control
• Support Operational Control• Support Program Control
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General Ledger Accounts
Account Group helps to control Master Data Creation and Maintenance
P&L Statmt acct type identifies to which retained earnings account P&Laccounts will close
Functional Area – can be used to default functional area, usually used in
commercial cost of sales accounting
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Account Groups
County of ______ has the above three groups.
Field Status indicates what fields will be invisible, required, optional, or displayonly for general ledger master records assigned to the account group
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Control Data
Tax Category – Posting without tax allowed should be checked for allexpenses accounts
Reconciliation Accounts – County of ????? has three types of reconciliationaccounts: Customers; Vendors; and Assets. Reconciliation Accounts arecontrol accounts in the general ledger that represent summaries of the
entries that have been made in a subledger (AR, AP, or Assets)
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Control Data (cont’d)
• Account Management
– Open Item Management – used to manage‘intermediate’ accounts where entries move in andmove out – examples: GRIR – records liability beforeit can be assigned to a vendor; check clearing – checks issued/checks cashed (balance sheetaccounts), you must clear these accounts
– Line Item display – you probably want to set this on
for all accounts except reconciliation account, enablesdisplay of line items.
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Document Creation
Post Automatically only – if this is checked, manual entries (FB50,
FB60, etc.) will not be allowedRelevant to Cash Flow – to be set on cash accounts to assist in cashflow planning within Treasury module
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Field Status
Field Status Group determines what fields will behidden, required, or optional when enteringtransactions against this account. See list below.
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Field Status Example: Cost Accounts
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External Accounts
• Customers
– AR Invoices
• Vendors
– AP Invoices
– Procurement (PRs, POs)
• Banks
– ACH
– Checking – House Bank – Bank of America, 19 accounts defined
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Other Financial Accounting Dimensions
• Business Area – County of ????? Departments
• Funds – get definition from CFO
• Full Accrual Accounting - accounting method thatmeasures the performance and position of a company byrecognizing economic events regardless of when cash
transactions occur
• Modified Accrual Accounting - Governmental accountingmethod. Revenue is recognized when it becomes available
and measurable. Expenditures are typically recognized inthe period in which the liability is incurred except for :assets; inventories may be considered expenditures whenbought; interest on general and special assessment long-term debt is recognized on the date due; and use of
encumbrances.
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Statistical Postings
• There is no such thing as a general ledger
statistical posting• There can be statistical postings in costaccounting and in funds management.
• Cost accounting will have a statistical posting if it
posts to two cost objects. All internal orders arestatistical. Expense postings identify a costcenter AND an order.
• Funds management can identify commitmentitems as statistical. If a posting is made to astatistical commitment item, this item will not betaken into account for availability control
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Cost Accounting
• Cost Elements
• Cost Objects
– Cost Centers
– Internal Orders
– WBS Elements
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Cost Elements
CElem category – identifies whether a cost element is primary or secondaryand how it will be used.
Primary Cost elements correspond to Revenue and Expense Accounts, theseexist in the General Ledger
Secondary Cost elements do not exist within the general ledger. This type ofcost element is used to move costs around within the organization.
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Cost Elements cont’d
Quantity may be recorded, Useful when costs are directly related to units
(example: hours worked, service calls)
Default Acct Assgnmt is used to identify a default cost object, if one hasnot been identified on a posting. Not generally used in Public Sector.
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Cost Center
Validity Dates – controls the date range for which time dependentdata is valid (i.e. business area and functional area)
Business area – the department to which the cost center belongs
Functional area – the functional area to which cost center belongs
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Cost Center cont’d
The control tab allows one to lock (prevent) postings of the types identified.
For this cost center, planned and actual revenues are prevented and CostAccounting Commitment postings (not to be confused with fundsmanagement commitment postings).
The lock feature could allow one to selectively open and cost centers forposting.
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Internal Orders
Many internal order are statistical. All cost accounting entries mustpost against a real cost object also. So for all expense postings,you will also find a posting against an ‘actual’ cost center or a WBSelement.
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Internal Order Posting
Note the two postings on this document. Value type 11 means that the
posting is statistical. Value type 4 is actual
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Internal Orders cont’d
The above order types are available. The order type will determine which fieldsare required and the number that will be assigned to the order
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WBS Element
WBS elements provide a hierarchical method for breaking down a project.Costs can only be posted to WBS elements with the Acct checkbox marked.
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Misc Cost Accounting
• Work Orders are being used at County of ????. Froman accounting point of view, they are virtually identical tointernal orders.
• Work Orders are not statistical, they may receive ‘real’postings through confirmations (direct activityallocations), procurement, and direct AP and GL
postings
• Cost Accounting provides a way of evaluating operatingresults in a manner somewhat different than budget.
• Project Accounting is the method of tracking andevaluating associated costs
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Public Sector Accounting
• Fund Accounting – Fund Statements
– GASB reporting
• Grant Accounting – Grantor Restrictions
– Grantor Fiscal Year• Budgetary Accounting
– Budget Entry
– Availability Control
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Funds
Fund Type identifies the category of fund. Different fund categories havedifferent accounting rules
Fund types are all 5 characters. If the last character is ‘B’, the fund isbudgeted. If the last character is ‘N’, the fund is ‘not budgeted’.
A fund which is ‘not budgeted’ still posts to funds management. It istreated as having $0 budget and no availability control.
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Functional Areas
Functional Area is currently being used by some departments toidentify their programs.
In the future, functional area may be used to identify a combinationof program and governmental function (for GASB reporting).
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Commitment Items
Financial transaction category identifies the type of posting.Funds management only posts transactions with a category of30. Category 2 is revenue and 3 is expenditure.
Most balance sheet items are 50/3, reconciliation accounts 60/3,cash accounts 90/1, and GRIR 40/3.
Postings to Statistical Commitment items do not consumebudget.
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Funds Centers
Funds Centers represent an organizational unit with responsibility for
budget. Currently used for WBS elements and cost centers.
A default fund may be established. This fund will be used when one is notspecified on postings
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Funded Programs
Funded Program is not currently used. Intended for use to control budgetfor WBS elements and Internal orders so funds centers do not proliferate.
Can be designed for other uses.
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Grants
Intentionally omitted
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SAP Delivered Master Data/Posting Relationships
• P&L Accounts are 1:1 with primary cost
elements• Postings in cost accounting must have one
actual posting
• Secondary cost elements post into costaccounting only
• Everything else has been configuredor designed for County of ?????!!
Account Level Relationships
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Account Level Relationships
FM
CO
GLRegularBalance
Sheet
SpecialBalanceSheet:Assets
Inventory
P&L
BS CommitmentItems
Fin Trans Cat40,50,60,90
Expenditure CommitmentItems Fin Trans Cat
30 – Posting Level
PrimaryCost
Element
SecondaryCost
Element
Expenditure CommitmentItems Fin Trans Cat
30 – Budgeting Level
Expenditure Commitment
Items Fin Trans Cat30 – AVC Level
5200000
5210110
5210100
5210100
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Account Design
• GL Account numbers 1:1 with commitment
items• GL P&L accounts are 1:1 with primary cost
elements
• Secondary cost elements have not yetbeen used
• Intelligent numbering
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Intelligent Numbering Accounts
• 7 digit number
– First digit is account classification• 1 = Asset
• 2 = Liability
• 3 = Equity
• 4 = Revenue• 5 = Expense
• 7 = Internal Settlement (CO only)
• 9 = Administrative Designations
– Subsequent digits are meaningfully grouped (e.g. 51sare payroll, 52s are external expenses, 55s areinterfund expenses)
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Cost Object to Funds Center Relationships
FM
CO
Cost
Center3200011100
CostCenter
3200011200WBSSRS-04113-01WBS
SRS-04112-01
Funds CenterBudgeting/Posting
Level 3200011000
Funds CenterBudgeting/Posting
Level 6139011000
Funds CenterAVC Level
3200010000
Funds CenterAVC Level
6139010000
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Cost Center Design
• First 4 digits of cost center represents department andbusiness area (it is possible to produce full balancesheets by business area)
• The first 6 digits of cost center represents program
• The first seven digits of cost center correspond to theposting/budgeting funds center, 000 is added to the end
of the funds center number giving a 10 digit funds center(e.g. cost center 3200011100 derives funds center3200011000)
• The first 6 digits of cost center correspond to the AVCfunds center, 0000 is added to the end of the fundscenter number giving a 10 digit funds center (e.g. costcenter 3200011100 derives funds center 3200010000)
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WBS Element Design/Integration
• Projects contain WBS elements, projects have an invertedtree structure.
• Only lowest levels in the project structure should be
postable• Funds centers are created to control project expenditures• A derivation table links WBS elements to budgeting/posting
funds centers
• For funds centers with ’99’ in the positions 5 and 6, thebudgeting/posting funds center is also the AVC fundsCenter
• For others, the first 6 digits of funds center correspond tothe AVC funds center, 0000 is added to the end of thefunds center number giving a 10 digit funds center (e.g.funds center 6139011000 derives funds center6139010000)
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Account Assignment Derivation
• Account Assignment Derivation Strategydetermines how one gets from the items enteredon transactions to the items posted in Budgetary
Accounting and Fund Accounting• Current strategy logic primarily geared towards
commitment items and funds centers
• Users must enter fund, functional area, andgrant on most transactions
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Account Assignment Derivation cont’d
Note: Funds center is the first 7 characters of cost center followed by 000
There is a derivation table to determine the funds center for WBS elements
Commitment item is 1:1 with GL account and secondary cost element
C O C
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Control Object Derivation (AVC)
• Control Derivation Strategy determineshow one gets from FM items derived in theaccount assignment to the control objectswhich are used to control budget (AVC)
• Current strategy primarily geared towards
commitment items and funds centers• Users entered fund, functional area, and
grant are used
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Control Object Derivation (AVC) cont’d
Note: Generally, the control funds center is the first 6 characters of thebudgeted (and posted) funds center followed by 0000. The control commitmentitem is the first two characters of the posted commitment item followed by
00000.